NASAA study on aging advisers suggests firms consider requiring succession plans

A report from the organization of state and provincial securities regulators found that brokerage and advisory firms need to address issues related to the aging of their increasingly older adviser workforce.

The report from the North American Securities Administrators Association’s committee on senior issues and diminished capacity was based on a series of discussions that state and provincial securities regulators had with broker-dealers, investment advisers and compliance consultants to understand how the industry handles issues related to diminished capacity and cognitive impairment of financial professionals.

The report suggested firms encourage or even require all financial professionals to establish a succession plan regardless of age, and identified several areas for firms to consider, including whether appropriate staff are trained to recognize the red flags of diminished capacity and cognitive impairment. Those interviewed believe there are roles for regulators to play in identifying the problem and setting guidelines and goals on how to address it.

“Addressing financial professionals with cognitive impairment or diminished capacity requires sensitivity and respectfulness. Each situation will present differently and firms will have varying resources to address these concerns,” notes the report, which was prepared by a working group chaired by Claire McHenry, deputy director of the Nebraska Bureau of Securities.

The NASAA board-level committee on senior issues is chaired by Deborah Gillis of the New Brunswick Financial & Consumer Services Commission.

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